The great landlord exodus in SA despite rental crisis
SA investors are fleeing the market in droves as the financial stress of meeting rising mortgage repayments worsens, only putting further pressure on the rental supply crisis.
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The number of landlords selling their investment properties is at its highest level since interest rates started rising, placing further pressure on tenants in the middle of a rental crisis.
According to PropTrack data, 21.5 per cent of all property sales in June were by landlords – the highest rate they have been at since interest rates started climbing in May 2022.
The official cash rate currently sits at 4.1 per cent, whereas in May, when 18.48 per cent of landlords were selling, it was at just 0.35 per cent.
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South Australian Council of Social Service chief executive officer Ross Womersley said while landlords selling did not necessarily mean fewer rentals in the pool – because its purchasers may have been renting, thereby freeing up another property and retaining equilibrium – it did cause concern for those properties’ tenants.
“Once a property is sold, a tenant is always at risk of having to find an alternative or having the rent increased, so for the current occupant that’s going to be a major concern,” he said.
“The bottom line here is we still have this massive issue of supply, and particularly rental supply, for low and modest-income households, and for as long as there is a lack of supply, small changes like this may increase the difficulty for people in finding rental accommodation.”
Ray White Paradise selling agent Andrew Baldino said he had seen an increasing number of landlords sell in recent years, with many looking to capitalise on the value growth their properties have experienced in recent years, but many others doing so due to financial pressures.
“It’s definitely more prevalent – you hear from sources that there are about 150,000 homes on a fixed rate rolling over to a variable rate by the end of the year, and a lot of investors are in that category, and a lot of them aren’t going to be able to hold onto their properties,” he said. “I’m selling properties where 70 to 80 per cent of the inquiry would have previously been from investors, whereas now they make up only 30 to 40 per cent – it’s mainly first homebuyers.”
Drumsticks Takeaway North Haven owner Seve Kengos, 60, is currently selling her 1/310 Victoria Rd, Largs North investment property of more than 10 years through Mr Baldino and said the reason for sale was more down to convenience than financial necessity.
“Being European we’ve tried to help our kids out as much as we can, and it’s now a bit too small for them so we’re looking to upgrade,” she said.
“We started small with a small property and then down the track upgraded and it’s nice to think that by selling we might be giving another family the opportunity to do the same.”
Ms Kengos said it was market-wise to sell.
“But we’re not going to be greedy – it doesn’t pay to be greedy,” she said.
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Originally published as The great landlord exodus in SA despite rental crisis